An analysis of factors affecting the flow of agricultural credit in Uttarakhand

Hill agriculture of Uttarakhand state characterize by fragmented and very small size of average holding of 0.40 ha, low input-low output production system largely dependent on rains and low risk bearing ability of farmer. Most of the farmers in 11 hill districts out of 13 in Uttarakhand state were able to produce food grains, which was adequate only for three to six months of their family requirements. Because of poor resource base they were unable to exploit the market opportunities arising due to changing economic environment. Agriculture credit can break the vicious cycle of poverty if effective credit support was available to farmers to diversify and modernize their agriculture. Experience indicates that many farmers do not come forward to borrow from institutional credit agencies and thus practice internal credit rationing. Evidences also indicate that many farmers did not get institutional credit in adequate quantity, at right time, at reasonable cost while many others did not have access to institutional credit at all.